04/07/2025

FRIDAY | JULY 4, 2025

16

BIZ & FINANCE

Trump to put 20% tariff on Vietnam’s exports of the Communist Party of Vietnam,” Trump wrote on his Truth Social platform.

Philippine central bank: Room for two more rate cuts this year MANILA: The Philippine central bank could cut its policy rate twice more this year, its governor said yesterday, with benign inflation levels providing room to ease the country’s monetary settings. “There is room, because inflation is low,” Bangko Sentral ng Pilipinas Governor Eli Remolona told reporters. BSP delivered a widely expected rate cut last month, bringing its key rate to 5.25%, its lowest level in two and a half years. Further policy easing could help boost economic growth after the government revised its target downwards for this year to 5.5%-6.5% from 6%-8%, and also narrowed growth goals for 2026 to 2028. Inflation in May eased for a fourth straight month to 1.3%. The statistics agency will release June inflation data today and the central bank expects consumer price rises to have fallen below its 2%-4% target over the month. Economists in a Reuters poll expect inflation to have picked up to 1.5% in June. Remolona said the central bank is keeping its inflation target unchanged for now. The central bank has three remaining policy meetings for the year. – Reuters South Korea president says ‘doing utmost’ for trade deal with US SEOUL: South Korea’s President Lee Jae Myung said yesterday his administration was doing its “utmost” to secure a trade deal with the United States ahead of President Donald Trump’s deadline next week for imposing fresh country specific levies. “It’s certainly not easy, that much is clear. And to be honest, I can’t say with confidence that we’ll be able to wrap everything up by July 8,” Lee said at a press conference marking his first month in office. “We’re doing our best, and the goal is to reach a genuinely mutually beneficial outcome, but at this stage, both sides still haven’t clearly defined what exactly they want,” he said, adding: “All I can say for now is that we’re doing our utmost.” Already hit by sector levies on steel and car exports, Seoul is laser-focused on negotiations over a 25% country-specific tariff that has been suspended until next week. Without an agreement, it will come into effect just after midnight Washington time on July 9. Seoul’s Ministry of Industry and Trade confirmed this week it is seeking an extension. “With the US tariff suspension deadline fast approaching, the direction of Washington’s future actions remains highly uncertain and volatile, including whether the suspension will be extended,” Trade Minister Yeo Han-koo said yesterday. Yeo said the reimposition of US tariffs would be a “grave situation” requiring an all-out, government-wide effort to minimise the negative impact on the economy. Lee assumed office facing a daunting array of challenges, from a deepening economic slump and intensifying global trade tensions to rising alarm over growing military cooperation between North Korea and Russia. He inherited a nation deeply fractured by the crisis triggered by his predecessor, Yoon Suk Yeol, whose attempted imposition of martial law in December sent shockwaves through South Korean democracy. – AFP

especially in areas prioritised by both sides”, the statement said. Trump’s announcement comes a week before the threatened US reimposition of steep tariffs on dozens of economies, including the European Union and Japan, many of which are still scrambling to reach deals that would protect them from the measures. Those higher tariffs are part of a package Trump initially imposed in April, citing a lack of “reciprocity” in trading relationships, before announcing a temporary lowering to 10%. Without a deal, Vietnam’s “reciprocal tariff” would have risen from the baseline 10% to 46%. Since April, Washington had so far only announced a pact with Britain and a deal to temporarily lower retaliatory duties with China. Both involve the United States maintaining some of Trump’s tariffs on the trading partners. The terms of the UK deal are more narrowly focused than those announced by Trump with Vietnam, with London and Washington agreeing to cut US tariffs on cars from 27.5% to 10%, with a limit of 100,000 vehicles a year. It also fully eliminated the 10% tariff on goods such as engines and aircraft parts. In return, Britain agreed to further open its market to US ethanol and beef. – AFP

o Transshipments will face 40% levy while American goods are tariff-free WASHINGTON: President Donald Trump announced on Wednesday that he had struck a trade deal with Vietnam under which the country would face a minimum 20% tariff and open its market to US products. The deal comes less than a week before Trump’s self-imposed July 9 deadline for steeper tariffs on US trade partners to take effect if agreements are not reached. Shares in clothing companies and sport equipment manufacturers – which have a large footprint in Vietnam – rose on the news, but later declined sharply after the president released details including the continued tariffs, which were higher than expected. If confirmed, the terms of the agreement will significantly increase the price of shoes and clothing that Vietnam exports to the United States, but Hanoi escapes the threat of the more severe 46% tariff threatened by Trump in April. “It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary

He said that under the “Great Deal of Cooperation”, imports of Vietnamese goods will face a 20% US tariff, while goods that pass through Vietnam to circumvent steeper trade barriers – so-called “transshipping” – will see a 40% tariff. Trump’s trade adviser Peter Navarro has called Vietnam a “colony of China”, saying that one third of Vietnamese products are in fact relabelled Chinese goods. Trump said that “in return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade”, he said. “In other words, they will ‘OPEN THEIR MARKET TO THE UNITED STATES,’ meaning that we will be able to sell our product into Vietnam at ZERO Tariff.” The president said he believed US-made SUVs, “which do so well in the United States, will be a wonderful addition to the various product lines within Vietnam”. In a government statement, Vietnam confirmed that negotiating teams had come to an agreement to address the reciprocal tariff issue, but did not detail any tariff terms. Trump “affirmed that the US will significantly reduce reciprocal taxes for many Vietnamese export goods and will continue to cooperate with Vietnam in resolving difficulties affecting bilateral trade relations,

A salesman waiting for customers at a shoe store in Hanoi’s Old Quarter

yesterday. – AFPPIC

World Bank lowers Thailand’s GDP growth outlook BANGKOK: Thailand’s economic growth is projected to slow to 1.8% this year and 1.7% next year amid intensifying global and domestic headwinds, the World Bank said yesterday. pressure, the monetary stance is projected to become more accommodative in 2025,” the World Bank said.

earlier forecast, with foreign tourist arrivals expected to reach 37.4 million this year and only returning to pre-pandemic levels by the second quarter of 2026, the World Bank said. Internally, political uncertainties could delay next year’s fiscal budget and hold back investments in public infrastructure, causing spillovers into private investment and overall growth, the global lender said. Thailand’s Constitutional Court on Tuesday suspended Prime Minister Paetongtarn Shinawatra from duty pending a case seeking her dismissal. “With rising domestic and external uncertainty, as well as falling inflationary

Finance Minister Pichai Chunhavajira said earlier that Southeast Asia’s second-largest economy could expand by just over 1% this year due to the impact of US tariffs. Pichai is in the United States for trade talks this week. Washington has threatened to impose a 36% levy on imports from Thailand if a reduction cannot be negotiated before July 9, when a 90-day pause capping tariffs at a baseline of 10% for most nations expires. – Reuters

The growth forecasts were reduced from the 2.9% and 2.7% projected in February, respectively. Last year’s GDP growth stood at 2.5%, lagging peers. The slowdown reflects weaker exports and tourism, particularly due to a decline in arrivals from China, as well as weak domestic demand, the World Bank said in its Thailand Economic Monitor report. The recovery in tourism was slower than